Companies are falling short of investors’ expectations for clearer reporting on climate crisis issues, according to a new report ‘Climate-related corporate reporting’ from the FRC Financial Reporting Lab.
So, what do investors want? Well, they outlined that they would like companies to articulate:
*How boards consider and assess the topic of climate change.
*Whether, and how, the business model may be affected by climate change, whether it remains sustainable, and how the company may respond to the challenges posed.
*What the opportunities and risks are, including the prioritisation of risks and their likelihood and impact.
*What changes the company might need to make to strategy to capitalise on a changing climate and related opportunities.
*What scenarios might affect the company’s sustainability and viability.
*How the impact is measured and how the company measures climate-related challenges and the success of its strategy through strategically aligned, reliable, transparent metrics and financially-related information.
FRC’s CEO Jon Thompson said: “As societal and investor expectations evolve, alongside the regulatory environment, it is clear companies need to rapidly increase their transparency and improve their reporting to meet this demand.”